Deadweight loss:
A)occurs in markets that are inefficient.
B)occurs when markets are not in equilibrium.
C)is lost surplus due to less market transactions.
D)All of these are true.

Question

Quizplus · Accepted Answer

Deadweight loss can arise due to various factors resulting in market inefficiencies, which can occur when markets are not in equilibrium. It is essentially lost surplus that could have been captured through more market transactions that would have taken place in the absence of these inefficiencies. Therefore, all of the given options correctly describe deadweight loss.

Deadweight Loss